The impact of the fee-for-service reimbursement system on the utilisation of health services. Part II. Comparison of utilisation patterns in medical aid schemes and a local health maintenance organisation.

This study reports the results of a retrospective analysis of the use of a range of inpatient and outpatient services by the members of a health maintenance organisation (HMO), in which most providers are salaried, and by the members of three medical aid schemes in which providers are paid on a fee-for-services basis. The analysis shows significantly higher utilisation of all services by medical aid scheme members than by HMO members. Medical aid scheme patients saw all doctors 33% more often than their HMO counterparts. For general practitioners and specialists specifically, the differences were 36% and 18% respectively. Doctors looking after medical aid scheme beneficiaries ordered 133% more radiological procedures and 14% more pathological investigations than did those caring for HMO beneficiaries. Hospital utilisation was also higher for medical aid patients. While quality of care is difficult to measure, there are no reasons to suspect that significant differences in quality exist between the two systems described here. One factor that may contribute to the higher utilisation rates in the medical aid group is the higher average income of this group. However, these results also demonstrate that providers working in the fee-for-service system are likely to increase the supply of services compared with providers who are salaried. The different methods of reimbursement are compounded by the different practice settings in which these groups of doctors work; the HMO generates an awareness of costs that is absent from the independent practice, 'third-party payment' system of the medical aid schemes.(ABSTRACT TRUNCATED AT 250 WORDS)